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Possible pessimistic signals from Dell Technologies insiders selling shares

The fact that several Dell Technologies Inc. (NYSE:DELL) Insiders unloading a significant amount of shares over the past year may have caused some confusion among investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying than whether they are selling, as the latter sends an ambiguous message. However, when numerous insiders are selling, shareholders should investigate further.

While we would never suggest that investors should base their decisions solely on the activities of a company’s management, we think it is perfectly logical to keep an eye on the activities of insiders.

Check out our latest analysis for Dell Technologies

The last 12 months of insider transactions at Dell Technologies

Over the last year, we found that the largest insider sale was by Chairman & CEO Michael Dell, who sold $761 million worth of shares at a price of about $136 per share. This means that an insider sold shares at a price slightly below the current price ($139). Generally, we consider it discouraging when insiders sell below the current price because it suggests they were happy with a lower valuation. While insider selling is sometimes discouraging, it is only a weak signal. We note that the largest single sale was only 19% of Michael Dell’s shares.

Dell Technologies insiders have not purchased any shares in the last year. Below is a visual representation of insider transactions (by companies and individuals) over the last 12 months. If you want to know exactly who sold, for how much and when, just click on the graphic below!

Insider trading volumeInsider trading volume

Insider trading volume

If you are like me, you will not don’t want to miss this free List of small-cap stocks that are not only bought by insiders but are also attractively valued.

Insiders at Dell Technologies recently sold shares

There was significant insider selling of Dell Technologies stock last quarter. In total, insiders sold $1.4 billion worth of shares during that time, and we saw no purchases. Given that, it’s hard to say that all insiders think the stock is a bargain.

Does Dell Technologies have a high level of insider ownership?

Looking at the total insider stock holdings in a company can help you assess whether they are well aligned with common shareholders. I think it’s a good sign when insiders own a significant number of shares in the company. Dell Technologies insiders own about $49 billion worth of shares (that’s 50% of the company). Most shareholders would be happy to see this kind of insider ownership, as it suggests that management’s incentives are well aligned with those of other shareholders.

So what does this data say about Dell Technologies insiders?

Insiders have recently sold shares, but they haven’t bought. And there have been no purchases in the last year that would reassure us. But it’s good to see Dell Technologies growing its earnings. Although insiders own a lot of the company’s shares (which is good), our analysis of their transactions does not give us confidence in the company. So these insider transactions can help us build a thesis about the stock, but it’s also worth knowing the risks this company faces. A case in point: We discovered 3 warning signs for Dell Technologies You should be aware.

Naturally, If you look elsewhere, you may find a fantastic investment. So take a look at the free List of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulator. Currently, we only consider open market transactions and private disposals of direct holdings, but not derivative transactions or indirect holdings.

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This Simply Wall St article is of a general nature. We comment solely on historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

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